Inflation hits 42-month high,FinMin assures drop in food prices soon

Published: Friday, May 2, 2008, 19:35 [IST]

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New Delhi, May 2 (UNI) The headline inflation rate for the week ending April 19 surged to a 42-month high at 7.57 per cent, even as Union Finance Minister P Chidambaram assured food prices will come down sooner than prices of other items.

Last week, the inflation was at 7.33 per cent. The annual inflation rate was 6.07 per cent during the corresponding week of the previous year.

The Reserve Bank of India, on Tuesday, had announced 25 basis points hike in the cash reserve ratio as part of its inflation combating drive.

Mr Chidamabaram, talking to reporters in Bangalore, said the inflation, which went up to 7.57 per cent for week ended April 19 was not an all time high. In 2000-01, 48 weeks out of 52 had seen inflation over five per cent.

''It was seven per cent for 22 weeks during this period and above eight per cent for 12 weeks,'' he said.

Admitting that the inflation rate had been a worrying factor for the Government, the Finance Minister said ''The high inflation is worrying us. It is at the three-year high but broadly in the range predicted by the RBI. The current spurt is due to international development. Very sharp rise in the prices of crude, food and commodities worldwide have come at the same time, while earlier it was only with the rates of crude. Together this have a bearing on Indian economy as well,'' he said.

The Government had initiated various steps to contain the inflation rate and bring down the food prices, he said.

Mr Chidambaram said the Government had procured 154 lakh tonnes of wheat as of yesterday, as against the target of 150 lakh tonnes.

Last year, only 111 lakh tonnes were procured. It had procured 230 lakh tonnes of rice also.

''Therefore, food prices will come down sooner and the prices of other products, including manufactured products, will be contained and we will take steps in this regard. I sympathise with the people.

I request them to be patient and have faith in us,'' he said.

Leader of the Opposition in the Lok Sabha L K Advani, whose BJP observed a nationwide strike in protest against sharp rise in prices of essentials, said internal security and sky-rocketing prices were the two main issues, that the party would put before the people during campaign for the elections in Karnataka.

Launching the party's campaign for the Assembly election from Anekal in Karnataka, Mr Advani said after failing to check inflation, Congress' strategy was to go for early election in October.

Urging the government to take ''hard decisions'' to curb price rise and inflation, the Left parties asked the party units all over the country to intensify the ongoing anti-price agitation, including dehoarding campaign.

While the CPI said its high time the government effectively intervene in the grave situation on the price front, CPI(M) senior leader Mohammed Salim claimed had the government acted upon the six point charter of demands of the Left parties, inflation would have been curbed by now.

Meanwhile, the nationwide dawn-to-dusk strike call given by the BJP evoked lukewarm response across the country, including in the party-ruled states of Rajasthan and Madhya Pradesh.